LendingTree Releases Monthly Mortgage Offer Report for December

CHARLOTTE, N.C., January 8, 2017 – LendingTree®, the nation’s leading online loan marketplace, today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

December’s best offers for borrowers with the best profiles had an average APR of 3.80% for conforming 30-year fixed purchase loans, up from 3.75% in November. Refinance loan offers were up 1 bps to 3.70%. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.

For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 12 bps to 4.42%, the highest since July 2016. The loan note rate hit the highest since March 2016 at 4.32% and was up 14 bps from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.

Consumers with the highest credit scores (760+) saw offered APRs of 4.26% in December, vs 4.56% for consumers with scores of 680-719. The APR spread of 30 bps between these score ranges was 3 bps wider than in November and the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,586. The additional costs are due to higher interest rates, larger fees or a combination of the two.

Refinance APRs for conforming 30-yr fixed loans were up 7 bps to 4.31%. The credit score bracket spread widened to 24 from 20 bps, amounting to $12,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $241,973.

Average proposed purchase down payments have been rising for 8 months and reached $63,740.

Purchase APR by Credit Score Range

Purchase Mortgage Offers by Credit Score

Refinance Mortgage Offers by Credit Score

“Interest rates for 2017 were on average lower than had been expected at the start of the year but they did end the year on an upswing,” said Tendayi Kapfidze, LendingTree’s Chief Economist and report author. “Our report shows that the benefits of improving your credit score are even greater when interest rates are rising, as lenders often pass on higher costs to borrowers with poorer credit first.”

Kapfidze added, “As a borrower, there is nothing you can do about the general level of interest rates in the economy. Since we began tracking this data in April 2016, the rate for the average borrower has risen by 50 bps from 3.92% to 4.42%. However, borrowers with 760+ credit scores saw an increase of just 40 bps, while those from 620 to 639 had their rates increase by 80 bps, twice as much. If you are considering purchasing a home this year, or refinancing, take some action to shore up your credit score and improve the rates lenders will offer you. It’s also important to comparison shop for lenders that are offering more competitive rates to borrowers.”

About the Report
The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders. We believe it is an important addition to standard industry surveys and reports on mortgage rates. Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20% down payment. Most borrowers do not fit this profile. Our report includes the average quoted APR by credit score, together with the average down payment and other metrics described below. We stratify by credit score, so borrowers have added information on how their credit profile affects their loan prospects. The report covers conforming 30-yr fixed loans for both purchase and refinance.

APR: Actual APR offers to borrowers on our platform

Down Payment: Though analogous to the LTV, we find that borrowers identify more closely with the down payment. Academic studies have also found that the down payment is the primary concern for homebuyers and one of the main impediments to entering the homebuying market.

Loan Amount: The average loan amount borrowers are offered

LTV: Actual LTV offered to borrowers on our platform

Lifetime Interest Paid: This is the total cost a borrower incurs for the loan, inclusive of fees.

About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.